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State of Wisconsin |
Release 26-03 |
After an institutionalized person has been determined eligible for Medicaid, his or her cost of care must be calculated. Cost of care is the amount the person will pay each month to partially offset the cost of his or her Medicaid services. It is called the patient liability amount when applied to a resident of a medical institution, including those enrolled in Family Care, Family Care Partnership, or PACE who are in or likely to be in a medical institution for 30 or more days. Institutionalized people are expected to pay their patient liability to the institution they are residing in, or to their MCO if they are enrolled in Family Care, Family Care Partnership, or PACE, as of the first day of the month.
Calculate the cost of care in the following way:
| Note | 503, DAC, Widow or Widower, and COLA disregards that are used in eligibility determinations for Special Status Medicaid are not used in Patient Liability Calculations. |
If the cost of care amount is equal to or more than the medical institution’s Medicaid rate, the individual is responsible for the entire cost of his or her institutional care. He or she would be entitled to keep any overage without restriction. He or she would remain eligible for the Medicaid program and have no further financial obligation to the Medicaid program for that month.
Effective December 1, 2008, hospitalized people will be responsible for paying a patient liability. See Section 27.7.4 Transfers Between Institutions for information about patient liability calculations when a person transfers between a hospital and nursing home(s).
If a member is residing in an institution (see Section 27.1 Institutions) and not Medicaid-eligible as of the first of the month, there is no patient liability for that month.
If a member was not institutionalized as of the first of the month or was discharged to the community prior to and including the last day of the month, there is no patient liability. However, if the member is enrolled in Family Care, Family Care Partnership, or PACE, he or she may owe a cost share to the MCO if a cost share is determined following the change in living arrangement.
Exceptions:
If the patient liability amount in the month of death is greater than the nursing home’s cost of care for that month and the nursing home or entity responsible for collecting the patient liability requests it, the patient liability can be adjusted to be equal to the nursing home charges for that month (see Process Help Section 12.18.1.2.3 Death).
There is no patient liability in a month in which a member moves from one of the following:
Effective December 1, 2008, when an institutionalized person transfers between institutions (nursing homes, hospitals, hospices) in the same month, do not prorate the patient liability between the various institutions that he or she resided in during that month. The member will pay his or her patient liability to the institution that he or she were residing in on the first day of the month. ForwardHealth will automatically deduct the appropriate patient liability amount from the first nursing home, hospice, or long term inpatient hospital claim received for the member. If the amount of the patient liability exceeds the reimbursement amount of the first claim, the remaining liability amount will be deducted from the next claim(s) received for services provided in the month that patient liability is owed. Patient liability amounts deducted from claims will appear in the provider’s remittance information. Nursing home, hospice, and inpatient hospital providers may have to occasionally transfer a patient liability amount that they collected from a member on the first day of a month to the appropriate provider who ultimately had the claim adjusted to reflect the required patient liability amount.
Occasionally a nursing home or community waivers applicant becomes retroactively eligible. This might happen, for example, when a person, having been denied eligibility, goes to a fair hearing. If the fair hearing determines the person was eligible at the time of application, the agency must retroactively certify him or her and compute retroactive cost of care. The directions are the same as for current cost of care (see Section 27.7.1 Introduction).
Deduct the personal needs allowance (see Section 39.4.3 LTC Post-Eligibility Allowances) for all institutionalized members in both the eligibility test and the patient liability calculation.
An institutionalized person's personal needs allowance may accumulate to where he or she may lose eligibility due to excess assets. To prevent this, he or she can spend money on personal needs or make a refund to Medicaid (see Section 22.1.9 Voluntary Recovery [Not Estate Recovery Program]).
Medical or remedial expenses an institutionalized applicant or member has incurred, and is legally obligated to pay are used as a monthly need expense when determining eligibility for Medicaid. See Section 27.6 Monthly Need.
Medical or remedial expenses an institutionalized applicant or member has incurred and is legally obligated to pay are allowed as an income deduction to reduce the patient liability amount. This is sometimes referred to as a “deviation” request when the expense is owed to a nursing home.
See Section 15.7.3 Medical/Remedial Expenses for additional details on countable expenses.
| Example 1 | In February, Al had a root canal performed by a dentist who is not a Medicaid provider. Al is responsible for paying $600 for the procedure. Al began making payments of $100 per month on this medical bill in March. On April 1, Al became institutionalized and eligible for Medicaid. The $100 payment that Al is making on a previously incurred medical expense is a need item when determining Al’s institutional Medicaid eligibility, and an income deduction when calculating Al’s patient liability through August. For September, there is no balance remaining on his bill and the expense is removed. |
| Example 2 | In April,Edna applied for institutional Medicaid and requested a two-month backdate to February, when she first became institutionalized. Her backdated request is denied because her assets exceed program limits, but institutional Medicaid is approved effective April 1, with a $1200/month patient liability. Edna has an outstanding balance of $6,000 at the nursing home for February and March dates, which is a countable medical expense for both her monthly need and patient liability calculations. The expense can be applied for April to August ($1,200 x 5 months =$6,000). Edna’s expense decreases her patient liability to $0, but she pays the nursing home the calculated patient liability of $1,200/month, which is applied to the outstanding balance through August. For September, there is no balance remaining on her bill and the expense is removed. She continues to pay the $1,200/month patient liability. |
This page last updated in Release Number: 26-03
Release Date: 08/12/2026
Effective Date: 08/12/2026
The information concerning the Medicaid program provided in this handbook release is published in accordance with: Titles XI and XIX of the Social Security Act; Parts 430 through 481 of Title 42 of the Code of Federal Regulations; Chapters 46 and 49 of the Wisconsin Statutes; and Chapters HA 3, DHS 2, 10 and 101 through 109 of the Wisconsin Administrative Code.
Notice: The content within this manual is the sole responsibility of the State of Wisconsin's Department of Health Services (DHS). This site will link to sites outside of DHS where appropriate. DHS is in no way responsible for the content of sites outside of DHS.
Publication Number: P-10030